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Interbrand top30 Japanese brands

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Interbrand Japan’s Best Global Brands 2011Announcing “Japan’s Top 30 Global Brands” and“Japan’s Top 30 Domestic Brands”Although the Toyota brand retained its number-one valueranking, it fell 16% from last year.Nomura, Unicharm, and Ajinomoto made the rankings for thefirst time.NTT Docomo ranked Japan’s number-one domestic brand butis only 1/3 the value of China Mobile!Global brand consultant Interbrand has released “Japan’s Best Global Brands 2011”, aranking of the values of Japanese brands according to a global standard. This ranking convertsthe values of global brands originating in Japan — the brands of Japanese companies doingbusiness globally — into monetary amounts, and ranks them. This year is Interbrand’s thirdpublication of this ranking. The Japan’s Best Global Brands ranking can also be compared with“Best Global Brands”, a ranking of the top 100 global brands that Interbrand has beenpublishing every year since 1999. 2

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Interbrand Japan’s Best Global Brands 2011Highlights from “Japan’s Best Global Brands 2011”In this year’s ranking, the recalls that plagued Toyota (-16%; 1st place) at the beginning of 2010were covered by papers worldwide, causing consumers to lose trust in the Toyota brand. As aresult, the values of both the Toyota and Lexus (-19%; 8th place) brands fell substantially. Thisdrop in value was enormous: the total value of the top 30 brands fell 3% from the previous year.But if the drop in value of these two brands is excluded, the total grew 2% overall, showing thestrong reputation of most Japanese brands despite the highly unfavorable exchange rates of theJapanese yen in 2010.Meanwhile, Shiseido (+3%; 10th place) continues its meteoric rise in the Chinese market. Thisyear it became the first non-automotive or electronics brand to break into the top 10.The brand that most increased its value year on year was Asics (+12%; 22nd place), thanks toits popular running shoes, as well as its reinvigorated promotions of European apparel productsthat brilliantly communicate the brand philosophy.Three brands made the ranking for the first time this year:Nomura (16th place), whose global presence skyrocketed after taking over Asia Pacific,European, and Middle Eastern personnel and operations from the former Lehman Brothers;Unicharm (28th place), which continues to battle P&G and other global brands, especially in EastAsia and Southeast Asia; and Ajinomoto (29th place), which does sales in over 100 countriesworldwide, and began publishing common global standards for personnel, providing equalopportunities and chances at education to its around 20,000 foreign employees.Although each of these companies is in a different industry, a large number of global brands arecompeting in each one, and focusing their efforts on Asia.The reputations of automotive and electronics brands were split. Some brands grew by 10% ormore year on year: Nikon (+11%; 13th place) enjoyed growth in the SLR camera market, whichis its strength; Fujitsu (+10%; 24th place) launched a new globally integratedbrand-communication campaign; and Hitachi (+10%; 25th place) is strengthening itssocial-innovation business. Meanwhile, some brands fell by 10% or more. These include theabovementioned Toyota and Lexus, as well as Yamaha (-11%; 21st place). These brandsalready have high levels of global recognition, but as they move forward, they will need toincrease customer loyalty by positioning themselves in a way that differentiates them. 3

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Interbrand Japan’s Best Global Brands 2011Special Feature 1 :Japan’s Top 30 Domestic Brands(Overseas sales making up less than 30% of total sales)As described above, one of the requirements of the “Japan’s Best Global Brands” ranking isthat the company’s overseas sales make up 30% or more of its total sales (from FY 2009 results).Brands that do not meet this standard (whose sales are mainly in Japan) are adopting policies forexpansion overseas, especially into Asia, within the next few years.This year, we have additionally calculated the values of the top 30 domestic brands: brands whoseoverseas sales were less than 30% of total sales (from FY 2009 results), and therefore did notqualify as “global brands” (FY 2009 results). We believe that some of these brands may be Japan’snext global industry/brand, following in the footsteps of automotive and electronics brands.The number-one domestic brand was NTT Docomo. This was one of the three mobile carriers tomake the top 10, together with Softbank (3rd place) and au (5th place). Three “megabank”group brands also made the top 10: MUFG (2nd place), SMFG (4th place), and Mizuho (6thplace). The other members of the top 10 were Uniqlo (7th place), Kirin (8th place), Kao (9thplace), and Rakuten (10th place).By industry, financial service brands were the most numerous. In addition to the three brands inthe top 10, Tokio Marine (11th place), Dai-ichi Life (21st place), and Orix (29th place) alsomade the ranking. Each of these brands is advancing steadily toward becoming a global brand.For example, MUFG launched its first retail business in Hong Kong at the end of 2010, and TokioMarine has been aiming to expand overseas in recent years, especially in Asia, and is involved inlarge number of mergers and acquisitions.Financial service brands are also the most numerous type of industry in the Top 100 “Best GlobalBrands”. Amid the unstable markets following the financial crisis, new brands are gainingstrength. For example, last year, in addition to US brands, Barclays (UK), Credit Swiss(Switzerland), and Santander (Spain) also made the global brands ranking.The next-highest number of entries in the Japanese domestic ranking was by food and beveragebrands. Five food and beverage brands made the ranking: Kirin; Asahi (12th place); Nissin(13th place); Yakult (22nd place); and Meiji (24th place). As with financial service brands, manyfood and beverage brands also made the “Best Global Brands” Top 100 ranking, and thisindustry also has great potential for becoming a global brand. In fact, each of these brands iscurrently expanding overseas, with a focus on emerging economies (especially in Asia), and 5

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Interbrand Japan’s Best Global Brands 2011results are starting to appear. For example, in June of last year, Yakult’s average daily worldwidesales passed the 30 million bottle mark. Leading global brands from the west are also focusing onthese markets, and surviving this competition will be the greatest key to becoming a global brand.There are also many personal care brands in the “Best Global Brands” ranking, includingL’OREAL and NIVEA. Kao made this year’s Top 30 domestic brand ranking. Japanese brands,including Shiseido and Unicharm, both of which are ranked among “Japan’s Best GlobalBrands”, have better understanding of local Asian populations than the leading Western brands,and their increasing popularity in Asian markets is a key step toward becoming global brands.On the other hand, some of the brands in the Japanese domestic ranking buck the trends in theglobal ranking: these are convenience-store brands, construction and real-estate brands, andInternet-service brands.The convenience-store business model was born in the United States, and grew enormously inJapan. This model is currently spreading around the world, especially in Asia. Two brands madethis year’s domestic ranking: Lawson (15th place) and FamilyMart (20th place). FamilyMartalready has significant international penetration, especially in Asia — with over 9,000 storesoutside Japan (as of end-2010). Moreover, it is possible that its worldwide recognition will increaseas it expands in scale through growth in each country, making it a true global retail brand. (Note:Seven Eleven was excluded from this ranking because it was created in the United States.)Four construction and real-estate brands made the domestic ranking: Mitsubishi Estate (17thplace); Mitsui Fudosan (18th place); Sekisui House (25th place); and Daiwa House (27thplace). The branding-building methodology of creating combined housing, hotel, and shoppingcomplexes through visionary urban-planning, and the experience they offer differentiates thesebrands from Western-style mega malls. These brands have significant potential to compete on theglobal level, and hint at the possibility of becoming worldwide leaders in next-generation urbanplanning.Three Internet services made the domestic ranking: Rakuten ; Mobage (28th place); and Gree(30th place). Although Mobage and Gree have yet to launch a full-scale overseas expansion,massive growth of their brand value is expected from their successful market entry, when theirunique business models are accepted internationally. Google, which is currently ranked 4th in the“Best Global Brands 2010”, was only founded 13 years ago. Internet service brands aregrowing at a much faster pace than other industries, and massive growth can be expected byacquiring the position of a global standard. 6

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Interbrand Japan’s Best Global Brands 2011Special Feature 2 :Comparison of Japanese and Chinese BrandsGrowing toward Global Brand StatusEvery year, Interbrand announces the “Best Global Brands”, a ranking of the 100 global brandswith the highest value. In July 2010, Interbrand released the “Best Chinese Brands”, a rankingof the top 50 Chinese brands which do not qualify for inclusion in the global ranking. With thisrelease of the top 30 Japanese global brands and the top 30 Japanese domestic brands,Interbrand compared Japanese brands with rapidly growing Chinese brands, analyzed trends forthese brands, and compared them with global brands to gauge their success from the globalperspective.It seems certain that China’s GDP surpassed that of Japan in 2010, vaulting it into the position ofthe world’s second-largest economy. Although the Japanese and Chinese economies areneck-and-neck in terms of size, there is currently less competition from the perspective of globalbrands. While Japan had six brands in the “Best Global Brands 2010” (Toyota, Honda,Canon, Sony, Nintendo, and Panasonic), China had none.However, the top-ranked brand in “Best Chinese Brands 2010”, China Mobile, would rankeighth in terms of brand value if placed in the “Best Global Brands 2010” table. This would rankit higher than Japan’s top brand (Toyota), showing that the massive size and high growthpotential of the domestic Chinese market give Chinese brands extremely high value. We thusverified the value of Japanese and Chinese brands by industry, including comparisons with globalbrands. 8

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Interbrand Japan’s Best Global Brands 2011Analysis by sector:AutomotiveAlthough Toyota was rocked by a recall in 2010, it remains the world’s most valuable automotivebrand. Honda is ranked fourth following Mercedes-Benz and BMW.Japan has many other global-level automotive brands, in “Japan’s Best Global Brands 2011”including Nissan, Lexus, Suzuki, Mazda, and Mitsubishi Motors. Meanwhile, although theChinese brands Dongfeng Motor, BYD, and Geely were ranked in the “Best Chinese Brands2010”, the values of these brands remain low. Chinese automakers are building strength byrapidly acquiring globally recognized brands. However, considerable effort will probably berequired to transform a made-in-China brand into a global brand. Brand Value Comparison （US million $） （Japanese/Chinese/Global Brands） 25,661 25,179 22,322 18,510 781 455 Toyota Honda Dongfeng BYD Mercedes- BMW Motor Benz Japans Best Global Brands Best C hinese Brands 2010 Best Global Brands 2010 2011 （Released July 2010） （Released September 2010）ElectronicsJapanese brands in the electronics industry have extremely high value. Canon, Sony, Nintendo,and Panasonic made the “Best Global Brands 2010” ranking, although they were somewhatbehind the globally successful Apple and Samsung. There were also electronics brands thatmeet most of the global standards, such as Toshiba and Sharp, which are ranked in “Japan’sBest Global Brands 2011”. 10

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Interbrand Japan’s Best Global Brands 2011Although several Chinese electronics brands made the “Best Chinese Brands 2010”, includingLenovo, Gree, Midea, and Haier, as with automotive brands, the values of these brands remainlow. Although there is growing global recognition for Lenovo, which acquired IBM’s PC division,and Haier, which has growing worldwide sales of white goods (large household appliances), theirscale remains extremely small. The value proposition of most Chinese white goods is low price,which does not equate to brand value. We believe that Japanese brands must create clear brandimages in the global market, and lock in relationships with loyal customers, before Chinese brandsbegin a push to shift from the low-price track to the brand-centric high value-added track. Brand Value Comparison (US million $） （Japanese/Chinese/Global Brands） 21,143 19,491 11,356 4,351 1,481 457 Sony Panasonic Lenovo Haier Apple Samsung Japans Best Global Brands Best C hinese Brands 2010 Best Global Brands 2010 2011 （Released July 2010） （Released September 2010）Personal careAlthough “Best Global Brands 2010” includes a large number of personal-care brands, theranking includes no Japanese brands in this category. In contrast, Shiseido and Unicharm madethe “Japan’s Best Global Brands 2011” list, while Kao made the Japanese domestic ranking.No Chinese personal-care brands made the “Best Chinese Brands 2010” ranking. There arecurrently no powerful domestic brands in China, while Japanese and Western brands are in fiercecompetition there. There is a 1.5-fold brand-gap between Shiseido and Lancôme, which isranked in the “Best Global Brands”, but this gap may shrink rapidly as Shiseido establishes aposition as a leading brand in China and other Asian markets. 11

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Interbrand Japan’s Best Global Brands 2011 Brand Value Comparison (US million $） （Japanese/Global Brands） 7,981 3,734 3,403 2,215 1,602 587 Shiseido Kao Unicharm LOreal NIVEA Lancome Japans Best Global Brands Best Global Brands 2010 2011 （Released September 2010）Financial servicesFollowing the financial crisis, the lineup of financial-service brands in the “Best Global Brands”ranking has changed dramatically. In addition to the former US-centric cast of brands includingCiti and Goldman Sachs, the latest ranking (“Best Global Brands 2010”) also includes suchEuropean players as Barclays (UK), Credit Suisse (Switzerland), and Santander (Spain).Although the highest-ranked financial-service brand in the Japanese domestic top 30 was MUFG,there is a 2.1-fold gap between its value and that of J.P. Morgan, which is the highest-rankedfinancial-service brand in “Best Global Brands”. Meanwhile, there are seven financial-servicebrands in the “Best Chinese Brands 2010” top 10 ranking, and the top-ranked bank brand,China Construction Bank, is 2.5 times greater than MUFG in terms of value.Buoyed by massive markets, we expect Chinese brands to follow the example of Japanese brandsand leverage their scale to invest worldwide. In today’s financial markets, however, where trust isa requirement, Chinese brands have not yet reached the global level. The impact of the financialcrisis on Japanese brands has been relatively small, and they have a history of worldwide trustand offer high-quality service. For them, the key to future success is to take initiative in brandingand reach the global level ahead of their rivals. 12

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Interbrand Japan’s Best Global Brands 2011Brand Evaluations in “Japan’s Best Global Brands 2011”■ CRITERIA FOR CONSIDERATIONThis ranking uses criteria for consideration that are similar to those of the “Best Global Brands” ranking publishedby Interbrand every year in order to clarify the values of Japanese brands that are active worldwide, and compare ,ranks using a “global standard.” Companies meeting the following criteria were selected for consideration: • •The brand must have been created in Japan – It must be a corporate or business brand that was created by a Japanese enterprise • It must publish financial information - It must be a corporation listed on a stock exchange as of October 31, 2010, and must make analyst reports available • Over 30% of its total sales must come from overseas sales (sales outside Japan) based on results from FY 2009 • Even if it is a B2B company, it must have general level of global recognition – It must have recognition of at least 10% among consultants at Interbrand’s global offices(Note: “Domestic brands” are selected by adding to the above the criterion the requirement that overseas salesaccount for no more than 30% of total sales)■ METHODOLOGYInterbrand’s methodology evaluates brand value based on its financial strength, the influence of the brand onpurchasing decisions, and the brand’s future earning potential. In the same way that securities analysts analyze andevaluate corporate value, we analyze and evaluate brand value based on the question, “What is its future earningpotential?” This methodology has been certified under International Organization for Standardization (ISO) 10668as a global standard for measuring the monetary values of brands. The evaluation consists of the following threespecific analyses.Financial Performance: Estimate the profits that the company will generateWe first estimate the current and future revenues of the business operating under the brand. We then arrive at thefuture economic profit by subtracting from that number the cost of sales, taxes, and capital cost from investedcapital. This analysis is based on published corporate data, while future estimates are based on performanceestimates made by financial analysts. (Note: the performance estimates by financial analysts employed in thisevaluation use the average estimated values by major analysts called the IFIS Consensus, published by IFIS Japan,Ltd. http://www.ifis.co.jp/index.htm)The IFIS Consensus data used is current as of November 18, 2010. 15

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Interbrand Japan’s Best Global Brands 2011Role of Brand: Identify the contribution that the brand makes to profitsWe next analyze the impact that the brand has on customer purchasing decisions, in order to identify thecontribution that the brand makes to the future economic profit calculated in the financial analysis. With regard tothe role that brands play in consumer purchasing trends, the evaluation uses a database of brand-value evaluationperformance that we have built up over the past 25 years, as well as benchmark analyses by industry. We thenresearch and analyze each individual brand based on its industry benchmark to calculate the brand’s contribution asa score.Brand Strength: Evaluate the future earnings potential provided by the brandBrand-strength analysis measures the brand’s power to generate client need (the ability to maintain future earnings)– market loyalty, repeat purchases by consumers and lock in – and calculates a current value by discounting thebrand’s earnings by this amount. This evaluation is a systematic method for determining a brand’s risk, and is madefrom a wide range of perspectives relating to the brand, including the brand’s market position, consumer recognitionand popularity, image, and support for the brand. The evaluation score is then converted into a discount rate, whichis subtracted from the brand’s future profitability to arrive at the brand value.Note: Role of brand and brand strength are calculated based on a multidimensional evaluation by expert consultantsat our global offices, using a wide range of published reports and other information. 16

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Interbrand Japan’s Best Global Brands 2011About InterbrandFounded in 1974, Interbrand is recognized for being at the forefront of the dialogue on brands asbusiness assets. Today, Interbrand is amongst the largest brand consultancies and has grown toinclude 40 offices in 25 countries. The combination of rigorous strategy and analytics withworld-class design creativity help its clients to create and manage brand value in all marketdynamics. It is widely respected for its annual study, The Best Global Brands, and creating abroader platform for the discussion on brands in the Webby-award winning websitebrandchannel.com. For more on Interbrand, visit http://www.interbrand.com/.Contacting us Interbrand Japan Contact： Burton Blume / Hiromitsu Hatakeyama tel:03-3230-1075 fax:03-3230-8772 contact@interbrand.co.jp 17